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Michigan, Do Not Be Fooled – You Just Lost More Than You Got in Return

No Fault Auto Insurance

On May 30th, the Democratic Governor of Michigan Gretchen Whitmer, signed what was called a bipartisan effort by the Republican controlled legislature and a few of the Democratic members to solve the problems of expensive automotive insurance in Michigan. Due to redlining, other nefarious schemes, and a lack of transparency to how fees were calculated, No Fault Insurance in Detroit was substantially higher than in other areas. It is true the state’s no fault insurance has been a cost burden on many people; but, every attempt made to understand the whys of the costs were stopped by Republicans. The lack of transparency in how the fees for the Personal Injury Protection portion of No Fault insurance were calculated, how fees to doctors and hospitals are set, and how much is in the PIP fund resulted in a constant battle.

With the revision, Republicans have left Michigan constituents with an over priced commercial healthcare insurance plan which does not mirror the care provided by No Fault’s Personal Injury Plan (PIP). Republicans have promised there will be a decrease in premiums. Yes, there probably will be such but it will not be equivalent to want has been lost in benefits and the payout may be reduced by increases in other areas.

Over the last couple of weeks Republican Senate Leader Mike Shirkey and the Republican House Leader Lee Chatfield have led the Republican controlled Senate and House along with a few Dems to pass a bill gutting the present No Fault Insurance in Michigan and stranding constituents. The new bill relies on Commercial Healthcare, Medicare, and Medicaid plans to replace life time Personal Injury Protection and guts the protections of No Fault. It does lessen the cost of Automobile Insurance but it also calls out for a 200 to 240% payment to hospitals and clinics for care. The CBO already studied Commercial Healthcare Insurance cost as compared to Medicare and found Commercial Healthcare pays 89% more than Medicare. The Republicans new plan is a large giveaway to the Healthcare Industry.

This is an abbreviated article of what was written by RN Julia Pulver of Medium Magazine who took the time to review the recent legislation passed by the Michigan Legislature before Memorial Day. RN Julia Pulver is a certified nurse case manager who worked in the field of catastrophic injury for 5 years.

In a planned nontransparent manner reminiscent of what the lame duck legislature did before the reins of the Governorship were handed over to Governor Whitmer, the Republican majority-controlled legislature passed legislation pre-Memorial day, sent it off to Governor Whitmer and asked her to sign it. This to similar to an attempt by a lame duck legislature when the governorship was changing hands earlier this year. No one has had time to review the bill and its potential issues. The Republicans are hoping Whitmer would just sign it, she did, and having felt boxed into a no-win situation.

Such a ploy by Republicans was to also avoid feedback and prevent input from those who already use this valuable portion of No-Fault Insurance covering the results of serious automotive injury. It is being done in such a manner to prevent experts such as RN Julia Pulver from having any input. It is being rushed off to Governor Whitmer’s desk to be signed (and I would urge Governor Whitmer to veto it) before Michigan constituents are aware of what they will lose.

Under the guise of equating Healthcare Insurance Medical benefits to No Fault Personal Injury Protection benefits, the Republican led bipartisan effort are applauding their efforts to take away protections resulting from automotive accidents. Furthermore (redundant alert here), there is no comparison between commercial Healthcare Insurance Medical Benefits and Personal Injury Protection Benefits as the former is only a part of the later.

Also keep in mind, the legislation will allow for medical payments 2 to 2.4 times of what Medicare allows for the same treatment. A Congressional Budget Office analysis had determined the average payout by commercial healthcare insurance is 89% higher than what Medicare pays out. This legislation allows more than twice such at 200 and 240% resulting in a big giveaway to Michigan hospitals, clinics, and doctors.

As researched by RN Julia Pulver, the following is what Michigan constituents will lose now that Governor Whitmer has signed this legislation:

• Coverage for wage loss for three years following an accident, usually 80% of your base wages, paid in real time, while you’re out of work.

• Coverage of guardianship costs for people with brain injuries.

• It pays for a home health aide who can help you with your activities in your own home.

• It pays for replacement services to offset the cost of household needs ( mow your lawn, etc.).

• It pays for modifications to your home and car if you are wheel chair bound or unable to use stairs.

• It pays for an occupational therapist to come to your home, assess what modifications need to be made, and determine the number of care giver hours you require to ensure you are safe in your home and everyone’s care needs are appropriate.

• It pays for an independent nurse case manager to be your patient advocate.

• It pays for long term rehab and community-based care allowing disabled patients to achieve and maintain as much mobility and independence as possible.

• It pays for intensive therapies for children to help physically recover and maintain their cognitive and physical abilities into adulthood.

• It pays for therapists to help injured people re-learn their jobs or find new jobs or skills to continue and lead meaningful lives following injuries.

• It provides transportation for those who can’t drive following an accident, get to their appointments, pick up prescriptions, and stay on track with their recovery. This keeps them out of the ER saving money in the end.

I would also urge you to read RN Julia Pulver’s more detailed article which can be found at the “Medium” to better understand the result of this legislation.

Do Not Be Fooled- You Just Lost More Than You Got.” RN Julia Pulver BSN, CCM; Medium, May 28, 2019

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Kiribati is Low But Not as low as Whale Shit at the Bottom of the Ocean

It is possible to cause a huge (short term possibly reversed) increase in carbon capture by algae by dumping iron sulfate in the ocean. On the other hand, uh, well, maybe it won’t work and you will just get a few tons of fish (not many tons of carbon containing detritus on the bottom of the ocean.

Now the general principal seems to be that, so long as there isn’t proof beyond reasonable doubt that a proposal will work, to stick to the tried and true and first do no harm but rather wait until the tundra melts, methane is released, and the climate is irreversibly altered.

This makes no sense. Conservatism may make sense if the choice is between the current state (which is not ideal) and gambling on something new. It makes no sense if one is careening towards a precipice, as we are.

There is an, as usual, interesting post at Vox.com.   Kelsey Piper discusses the unfortunate fact that rogues might attempt to fight climate change without scientific proof that ocean fertilization works and without international regulation of ocean fertilization. Personally, I think the near certainty of climate catastrophe if we stick to the current approach is a more serious problem.

The current approach is international negotiations to reach non binding agreements which from which Donald Trump withdraws the second largest carbon emitter.

In contrast, the dangerous rogue approach is something allowed by current non law, conducted by Native Canadians which had the side effect of a record salmon harvest.

I want to address two questions. First should we dump Iron Sulfate in the open ocean. I think the answer to this question is obviously yes. I have read no argument with any trace of possible validity against it. I might add that it works better if mixed with silicate and seeded with marine diatoms. But in any case, I have seen no argument anywhere that there is a non negligible risk of undesirable side effects.

Yet the official response, such as it is, is to condemn the efforts and seize everything that can be seized.

I attempt to understand what the hell is going on after the jump.

But before that I note:

What happens when some individual or country wants to go big in the battle against climate change without buy-in from their neighbors? Could a country unilaterally pursue climate solutions that, unlike ocean iron dumping, pose substantial risks?

Note the insanity. In a post on ocean dumping of iron sulfate, Piper says the real issue isn’t any possible bad effects of ocean dumping, but the fact that someone might do something else which is bad some time. But note also that even a tiny country which has authority over a lot of ocean could unilaterally dump iron sulfate. The country doesn’t need a lot of land area. The country doesn’t need high altitude. The country’s average elevation might be two meters above sea level.

Why doesn’t Kiribati dump all the iron sulfate they can buy in the huge expanse of ocean around their tiny soon to be drowned atolls ? What do they have to lose ? Who is going to stop them ? The side effect would be more fish around Kirbati. The policy would make sense even if oceans weren’t rising.

OK so what’s the problem ?

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Khamenei Denounces Rouhani For Negotiating Nuclear Deal

Khamenei Denounces Rouhani For Negotiating Nuclear Deal

This has been reported by Juan Cole.  Apparently Supreme Jurisprudent, Ali Khamenei of Iran in a speech to a large number of university students has seriously denounced President Rouhani for having negotiated the JCPOA nuclear agreement with the United States and other powers.  During the negotiations Khamenei played a mixed role, raising doubts about the negotiations, but allowing them to continue and for the agreement to be adopted and implemented.  As all know, Iran has until now kept its part of the agreement, whereas President Trump withdrew the US from it and has imposed even more serious economic sanctions on Iran than were there before the agreement, with other powers unable to substantially offset the US actions, even as their governments have continued to nominally support the agreement.  Thus, Khamenei has now fully and openly declared that his doubts were correct and that Rouhani was foolish to make the agreement.

This follows the announcement that Iran will begin nominally breaching the agreement by expanding its enrichment of uranium.  The violation remains relatively minor at this point, but it is a significant step in any case. With the US raising military pressure, even as Trump says he does not want a war, it seems that this situation is just getting worse with almost nobody making any effort to halt this slide into rising conflict.  As it is, Khamenei seems to be preparing his nation for the worst.

Barkley Rosser

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SOCIAL SECURITY, a little bad news (sorta) and a little good news (sorta)

by Dale Coberly

The bad news is that we have slipped past the day when we could have saved Social Security from ever reporting “short term actuarial insolvency” by raising the payroll tax one tenth of one percent per year (about a dollar per week). This is only sorta bad because it doesn’t really matter . . . sorta. Social Security can still pay ALL promised benefits forever . . . by raising the payroll tax one tenth of one percent per year.

The reason it is sorta bad is that the people who hate Social Security will react to a Trustees Report of “short term actuarial insolvency” as if the world was going to come to a violent end tomorrow and they would lose all their money. “We told you so!” would be their last words. Well, not their last words, unfortunately. They would keep saying it at least every year if not every day, loudly, in the halls of Congress and on a TV station near you. Even the serious and responsible ones.

That’s because at one tenth of one percent per year short term insolvency never goes away; it just gets put back a year every year. Actually, the one tenth percent per year would catch up and “short term insolvency” would go away. But not before the Congress did something stupid and “fixed” Social Security by privatizing it, or by turning it into welfare as we knew it . . . depending on which party gets the votes first.

But the good news is that “short term insolvency” could be made to go away by raising the payroll tax one-and-a-half tenths of one percent per year starting next year. This would be a dollar and a half per week. But the “per year” is misleading. The tax would only need to be raised about every other year for a few years and at increasing intervals after that. This would average less than one tenth of one percent per year until the tax increase stabilizes at a little less than two percent above the current 6.2%

There are many other ways to accomplish essentially the same thing. But this is probably the simplest. It is also the fairest because it spreads the cost more or less evenly over the people who will get the increased benefits from their longer life expectancy. It also avoids creating a large Trust Fund which gives the bad guys so many opportunities for mischief (mostly crying “Social Security is Broke! Flat Bust!”) whenever the Trustees Report says “the Trust Fund may run out of money in seventy-five years or so unless we raise the tax a tenth of a percent or so . . . when wages will be twice as high as they are now.”

Please note, the percent tax goes up, but due to the magic of mathematics and a rising standard of living, you will have more money (real dollars) in your pocket after paying the tax than you have today. AND you will get the “tax” back with interest when you need it most. Without a “means test.”

If we don’t get around to raising the tax one and a half tenths of one percent starting next year (2020), we would still be able to avoid further projections of “short term insolvency” by raising the tax two tenths of a percent by 2021. Again this would be only for a few years, then the tax increases could fall back to one tenth of one percent per year, OR we could continue with the two tenths every other year or so for a few years, and then at decreasing intervals for a few more years until the total tax increase reaches the magic two full percent above what it is today. That would be a sustainable level for as the eye can see into the infinite horizon.

But the really bad news is that you won’t do anything to make Congress understand this, and probably sooner than later they will “fix” Social Security in a way that destroys its value as retirement insurance for workers. REAL insurance. Backed by the full faith and credit of the United States of America, which used to mean something.

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A comment about the economy and the 2020 election

A comment about the economy and the 2020 election

Recently I’ve seen a bunch of takes to the effect that “the economy is doing great, and therefore it is likely that Donald Trump will be re-elected.” In my opinion that fear is overblown for three important reasons.

The first, least noteworthy reason, is that there is still a lot of time between now and the election. As I noted Monday, many – but not all – models of the economy indicate that a recession is likely between now and then, for reasons having nothing to do with the age of the expansion. Needless to say, a recession in 2020 would not bode well for either Trump or the GOP.

Secondly, consider what economic interventions Trump and the GOP have made since they inherited the economy from Obama. There have been three:

1. They passed a tax cut that lopsidedly favored the wealthy and corporations, that has generated zero acclaim from the middle and working classes – and with the decrease in tax refunds, may have generated net negative feelings.

2. Trump has started several trade wars that are proving unpopular, partly because they mainly have hurt portions of his own base, partly because they are  resulting in net higher prices to consumers that may be getting noticed, and partly because negatively affected businesses may start laying off workers.

3. Trump is held responsible for the government shutdown that resulted in a mini-recession.

In short, it’s not clear to say the least that the public at large would give Trump credit for an economy that he mainly inherited from Obama and as to which his known interventions have been received negatively.

Finally, and most notably, the example of the Bush vs. Gore 2000 election strongly cuts against Trump. As I wrote in 2016, all of the fundamentals-based election models, such as the “bread and peace” model, or models based on the unemployment rate or on consumer income and spending, indicated that Gore should have won by nearly a landslide, on the order of 55%-45%, as shown in the graph below:

Instead, Gore won the popular vote by only 0.5%, despite being able to run on both peace and prosperity – the biggest outlier of the entire series going back to 1952.

Two big factors held Gore back: first, the economic expansion had gone on for nearly 10 years, and at some point the public takes it for granted, or in other words, “so what have you done for me lately?” Second, as his Vice President, Gore was stained by Bill Clinton’s slimy personal life.

Both of the factors that worked against Gore in 2000 are likely to work against Trump in 2020: if the economy remains in expansion, the public will probably take it for granted; and Trump’s pervasive sliminess, both public and private, will work against him. In short, Trump is likely to underperform compared with the fundamentals even more than did Gore.

While the example of 2016 certainly means that the 2020 election is another “all hands on deck” moment for Democrats, and nothing should be taken for granted, even if the economy remains in expansion as it is now I do not think that means Trump wins the election.

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Trump Claims Obstruction of Justice is an Official Duty of the White House

Trump Claims Obstruction of Justice is an Official Duty of the White House

Tierney Sneed reports on Trump’s latest obstruction of justice:

The Justice Department on Monday issued a legal opinion claiming that Congress could not compel former White House Counsel Don McGahn to testify about special counsel Robert Mueller’s report. The opinion was released not long after reports that the White House was planning to instruct McGahn to not comply with a House subpoena that he testify at a Judiciary Committee hearing Tuesday.

The legal opinion can be found here and states in part:

Congress may not constitutionally compel the President’s senior advisors to testify about their official duties … This testimonial immunity is rooted in the constitutional separation of powers and derives from the President’s independence from Congress.

What an incredibly arrogant canard! McGahn is being asked to testify to Congress about what is clearly obstruction of justice – a crime. How is that an official duty of the White House? Oh wait – the Trump White House is nothing but a den of organized crime so maybe he sees committing crimes as one of his official duties!

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Nancy Pelosi is an able tactician, but a poor strategist. She will not save the Republic

Nancy Pelosi is an able tactician, but a poor strategist. She will not save the Republic

A couple of years ago I read Andrew Roberts’ tome on Napoleon. As a schoolboy, Napoleon voraciously inhaled everything he could read about military conflict, including several then-recent books suggesting novel tactics. As a young general, he implemented those tactics to brilliant effect, winning almost every big battle he fought.

But if he was a masterful tactician, he was a so-so strategist. His strategy essentially consisted of:

1. Invade neighbor’s country.
2. Win all the big battles.
3. Occupy his capital.
4. Accept large indemnities, and territorial and political concessions, in return for going home.

By the time he got to the last big continental power, Russia, Tsar Alexander and his generals had thoroughly analyzed Napoleon’s style. So they employed a colossal, masterful rope-a-dope strategy in which they retreated after every battle was started, denying him his decisive big victories while drawing him ever deeper into Russia’s heartland – ultimately 1000 miles. The tsar even allowed him to occupy Russia’s “old capital” of Moscow, and set it afire so that Napoleon could not use it to provision him during the winter. Then he simply ignored Napoleon’s entreaties to negotiate step #4. By the time Napoleon realized the tsar was simply going to refuse to capitulate, it was too late, and Napoleon lost over half a million men in the ensuing retreat through the brutal winter back to his nearest supply lines in Poland. Napoleon was fatally wounded, and Tsar Alexander’s men harried his retreat all the way back across Europe. Three years later, Russian troops occupied Paris.

Okay, so I’m not tarring Nancy Pelosi as making Napoleonic mistakes. But there is a comparison, because while Pelosi is a very able tactician, her excessive caution makes her a poor strategist.

Take the government shutdown. Common wisdom is, Pelosi won that battle. But look what was “accomplished:” in return for a government shutdown for about 45 days, with 800,000 federal workers furloughed without pay, causing an actual downturn in economic activity I’ve called a “mini-recession”:

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Sanctions On Iran Are Hitting Hezbollah

Sanctions On Iran Are Hitting Hezbollah

That is the top headline, upper right corner front page, of today’s Washington Post, a quite long article by Liz Sly and Suzan Haidamous.  WaPo has been much criticized by Trump and his supporters for alleged “fake news” critical of his leaving the Iran nuclear deal while Iran was compliant and not only reimposing the sanctions put on by Obama to get Iran to the negotiating table for that deal, but adding more and yet more leading to a military escalation that may have peaked.  So, now maybe WaPo is rewarding Trump for saying he does not want a war with Iran (I approve of that) by headlining this story that has long been pushed by his fans as a justification for all this sanctions imposing on Iran.  Maybe Iran has been well behaved on the nuclear deal (while wickedly testing ballistic missiles, not part of the deal), but, ah ha! the sanctions will hurt its evil terrorist proxies like Hezbollah, and, wow, now we learn they are, whoopee!

It does look that indeed the heightened economic sanctions on Iran have reduced its financial support for Hezbollah, and I am not a big fan of that group.   One source quoted in the WaPo story put Iran as providing about 70 percent of Hezbollah’s funding, with it unclear by how much that has been reduced.  Hezbollah has publicly reported that it has had its funding reduced and has initiated lots of fundraisers to help offset that.  It claims not to have reduced its support of social services or paying “families of martyrs.”  It is unclear if it has had to pull back much from its involvement in the war in Syria, where the final round is probably now in place in Idlib province in the Northwest.

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TDS vs ODS vs BDS

TDS vs ODS vs BDS

This is motivated by running on in the econoblogosphere to Trump supporters who when confronted with hard facts they cannot refute revert to name calling that those stating actual facts are suffering from “Trump Derangement Syndrome” (TDS).  I have recently seen it thrown out “liberally.”  What is going on here?

The beginning of this odd label dates to the George W. Bush era, specifically 2003 when the late Charles Krauthammer, a supporter of W. upset by widespread criticism apparently coined the term “Bush Derangement Syndrome” (BDS). to describe persistent W. critics, apparently especially Barbra Streisand.  As it was, while the term was out there it was not that  frequently used during Bush’s presidency as later, although it was used enough to become established as a legit term.

When Obama came in its obvious successor, Obama Derangement Syndrome (ODS) became a serious phenomenom.  The first version of it was the infamous “birtherism,” led by non  other than Donald J. Trump, now POTUS. This was a total lie, which at an obscure moment in 2016 that got no notice, Trump admitted officially was a lie. But reportedly now his most supremely fave adviser is Lou Dobbs of the CNBC network, who was also long a hard core birtherist.

We were subjected to a later stream of less obviously false accusations against Obama that the ODS crowd accepted without question, even as their factual underpinnings were undermined. So we had a string of supposed scandals that  to this  day anyone living in the Fox News  etc bubble believes without doubt.  So there was there “Fast and Furious,” a complicated matter of US guns being sent across the  Mexican border that later ended up killing US people. This is a complicated matter with arguably some Obama admin input, but ultimately it was a W. Bush program that went sour.

Another hot deal for the ODS crowd, still showing up was the supposedly great IRS scandal that  in the end also turned out to be a big nothing, although this fact has probably had less reporting.  So after the big Tea Party win in 2010 a bunch of their groups showed up at the IRS claiming to be “general welfare” groups but not  “political” groups.  Of course they were all political groups, and it was a low level IRS employee, reportedly a Republican, who initiated the obviously completely appropriate investigation of a bunch of groups claiming tax exempt status for not being political who were blatantly political. In the end they all got their undeserved tax breaks after the ODS gang got going with their false stories that this was all due to Obama plotting.

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Larry Kotlikoff’s Social Security editorial in “The Hill”

by Dale Coberly

KOTLICOFF ON THE HILL

with Social Security

 

Larry Kotlikoff wrote an editorial that appeared May 14 in “The Hill:”  https://thehill.com/opinion/finance/443465-social-security-just-ran-a-9-trillion-deficit-and-nobody-noticed

He cried, “Wolf! Wolf! Social Security ran a 9 Trillion Dollar Deficit last year and nobody noticed!”

He went on to explain this was the increase in the “infinite horizon Present Value of the Unfunded Deficit” from 2017 to 2018.

He neglected to explain that the infinite horizon Present Value of the Taxable Payroll is over ONE THOUSAND TRILLION Dollars. Or that the 9 trillion dollars did not come from Social Security spending any more money, or old people getting more benefits, or taxpayers running out of money. It came from revising the Discount Rate from 2.7% to 2.5%.

The discount rate is a kind of imaginary number at the heart of Present Value calculations. It is a guess about the real interest rate you might have to pay or might expect to get on or from an investment. Change the guess and you change the PV calculated. The PV is a useful concept if you know what you are doing. And insane if you don’t.

A more useful number for evaluating the ACTUARIAL deficit (NOT a debt) in Social Security finances is the percent difference between expected expenses and expected income. That turns out to be about 4%. This deficit starts in about 2030 and remains the same essentially forever. That means an increase in the FICA so-called “payroll tax” (it’s really a savings and insurance plan: you get your money back with interest, more if your luck is bad)… an increase of about 4% starting in about 2030 or so will pay all future needed  benefits essentially forever.
Kotlikoff even says as much, though in a way that neither you nor he noticed.

This is the amount of money you (we) will have to pay whether we have SS or not. It is the amount that will be needed to keep old people from living (dying) in the streets and eating out of garbage cans (this means YOU when you can no longer work). This can come from personal savings, redirecting investment profits, real government taxes (that you don’t get back), or living with your son-in-law. What Social Security does is let you pay for it yourself while you are still working. Protects your money from inflation. Pays interest that keeps up with the standard of living, and insures you against the accidents that all cash is heir to.

And since the worker only sees half of the FICA, he won’t feel the extra 2% deducted from his paycheck… especially as his paycheck will be more than 20% bigger. Moreover, since there is still time to raise the “tax” gradually about one tenth of one percent per year (or less, because as you raise the tax the “deficit” recedes into the future), no sane person will even notice it. One tenth of one percent of a 50k per year salary is one dollar per week.

Kotlikoff offers his own plan: force you to pay 10% of your income to a mutual fund. Then force you to pay real taxes to make up for the difference between what the mutual fund pays you and what you paid in (that’s 0% interest), with no guarantees if you lose your job, become disabled, or die with dependents.

You can find all of this out for yourself by actually reading the Trustees Report, page 200, (NOT the summary) and “doing the math” as opposed to just prating “it’s the math” like the reporters and commentators who have NEVER done the math, or understood it. OR you can run around screaming we are all going to die, and cutting off your own head because Larry Kotlikoff has bad dreams, for which he gets paid.

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